David Lerner Associates News

529 Plans and Quality Education

Core Facts


Wednesday, January 9, 2019

If you have kids, education is always on our mind. There’s a ton of data that shows that a child who had the benefit of an excellent education, K-12, and went onto get a college degree, had a much better chance of getting a good job and doing well in the future.

The catch is the cost of high quality education. It starts with early childhood education in preschool, possibly a private school for K- 12, and the rising costs of a college degree.

Over the past decade, the average cost of tuition and fees at four-year private colleges and universities have outpaced the rate of inflation by more than 3 percent. That’s a pretty steep rise in the amount you have to provide for your kid to get educated.

One solution is a 529 plan. This plan just got more interesting for people who want to pay for K-12 private school in certain states. New laws have made it possible to use the money saved in a 529 plan for more than originally intended or anticipated. 

A 529 plan allows you to save a total of $15,000 every year towards the education of a selected individual. You can withdraw from the account for qualified educational expenses, free of taxes.

Under latest federal law, you can withdraw up to $10,000 to pay for a student’s private K–12 tuition fees. Considering the national average private school tuition is approximately $10,413 per year that’s a pretty sweet deal.

It’s important to note that not all states allow this, so be absolutely sure to do your research and check if it applies to you or else you may have to pay taxes on the money you withdraw.

If you’re planning on making sure your children or grandchildren get the best education possible from their very first day at school right through to graduating from college, a 529 plan could be the answer. It gives you a way to fund their education and take advantage of a federal allowance at the same time.

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC

 

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About

Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Lawrenceville, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website: www.davidlerner.com

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Contact

Jake Mendlinger
Account Manager
Zimmerman/Edelson
516.829.8374 X 232
jmendlinger@zimmed.com

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